Blacklisted vendor wins millions in defense contracts

A Taiwanese contractor, identified as a "bad vendor," has continued to secure lucrative defense contracts despite being blacklisted by the National Chung-Shan Institute of Science and Technology (NCSIST) for supplying suspected Chinese-made raw materials for missile production. The vendor was flagged by NCSIST in 2021 and subsequently banned from participating in tenders for three years.

However, an audit report from the Control Yuan revealed that during its suspension period, the company was awarded 11 separate defense contracts by the Ministry of National Defense and its subordinate agencies. These contracts collectively amounted to over NT$33.94 million (approximately $1.03 million USD).

The audit highlighted a significant gap in the government's procurement oversight. While the Ministry of National Defense and NCSIST established a notification mechanism in April 2024 to share lists of blacklisted vendors, the audit found that this system was not fully effective. A comparison of NCSIST's blacklist from March 2025 with data from the government's electronic procurement network showed that nine blacklisted vendors had secured 84 government contracts totaling over NT$428.65 million (approximately $13.2 million USD).

Of these, six vendors obtained 18 contracts from the Ministry of National Defense and its affiliates, valued at over NT$92.51 million (approximately $2.85 million USD). The Control Yuan stated that the effectiveness of the notification mechanism "still has room for improvement."

NCSIST, operating as an administrative corporation, follows its own procurement regulations, which do not automatically align with the government's public announcement mechanisms for blacklisted vendors. This discrepancy creates a loophole, allowing blacklisted companies to continue bidding for and winning government contracts. The Ministry of National Defense has stated it will revise its procurement processes to enhance information sharing and risk warning capabilities, including posting the list of blacklisted vendors on NCSIST's procurement information website.

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the notification mechanism's control effect still has room for improvement.